January 23, 2010

If you've seen the new George Clooney movie, "Up In The Air", you probably left the theater like I did - completely bummed out.

My heartstrings were particularly twanged by the scene where Clooney's character, a downisizing hired guy, drops the unemployment hammer on what appeared to be a very 50+ automotive industry manager.

You could just feel the energy rushing out of the guy as he couldn't conceptualize what else he could possbily do in his work life other than what he had done for the past thirty-plus years.

Big corporations in particular have worked hard to create this mental bias among Americans that their way of worklife is the only preferred path.

But, I'm here to tell you that we 22-million strong self-employed and small business owners have figured out a way to combine joy and income, something harder and harder to find in a corporate job today.

We know that honest, sincere enthusiasm about what we sell attracts interested customers willing to pay a fair price for a solution to their problem. For many of us working on our own, we've learned that the only real limit to our personal income is how hard we want to work.

In the corporate world, one person can fire you. But to be truly "unemployed" as a self-employed person all of your customers would have to "fire you", and I don't think most of us are so stupid as to let this happen!

Now, I'm the first to tell you that there are unexpected ups and downs in your financial life as a self-employed person. I've certainly witnessed them during my 21+ years as my own boss.

But, let me tell you the key to keeping the joy - the sense of control we feel about the outcome of our work. Happy customers pay generously. In today's corporate world you can knock out your boss with your excellence and you'll still likely only get a 3% bump in your salary each year. So keeping those who control your corporate income happy often doesn't lead to a more financially secure life for you and your family.

In the end, it comes to down to a sharp reality - we get paid for using our talent, skills and experience to solve problems.

What's the best way to help assure continuous income doing this?

- Sell your talent to a corporation who often can't wait to dump you at the first sign of financial trouble, or...

- Sell your talent to a group of customers who become your friends and can't wait to buy from you again.

March 26, 2009

Why A Recession Can Be a Great Time To Start a BusinessBy Jeff Williams

What do GE, Microsoft and Hewlett Packard have in common?

All were launched during times of great economic uncertainty.

I have grown my company Bizstarters through three recessions and I believe that there are many opportunities to launch a successful business during a recession.

The basic needs of both corporations and consumers go on even during a recession. A business with a better solution to a common problem can make a nice profit while his competitors are floundering.

Here are my ten tips for safely launching during an economic hurricane include:

1. Center your business around a problem that is "pinching" a corporation or consumer. And offer an obviously better way to solve that problem.

2. Write a detailed description of how your business will provide superior customer service to each and every customer.

3. Figure out two or more ways to make revenue from what your business offers - don't be a "one trick pony".

4. Get some sales quickly, even if doing so requires that you act as a subcontractor to a larger company or you have to shave your pricing a bit to get your foot in the door.

5. Start from home to eliminate rent and other space-related costs, such as a whole new set of utility bills. Few customers today care where your company is based.

6. Before making any purchase for your business, ask yourself: "Is this the best deal I can find on this item?" Check to see if the item is on sale at a big box store; if an online discount coupon is offered; or if a used version of the same item will work just as well.

7. Promote your business aggressively but cost effectively by using sharply priced online services for such tasks as designing your company's logo, building its website and handling its e-mail marketing.

8. Use local small business contractors to perform jobs for your business that will boost your productivity but allow you to "buy as you need".

9. Look for a marketing partnership with another business that gives you a chance to sell your existing product or service to a new market.

10. Keep inventory of your product down by buying from local suppliers only as you sell, even if you end up paying a bit more for each unit.

December 06, 2008

The last I can remember so many jobs of hard-working Americans disappear in such a short time was in 1974, my first year in corporate management as a newly-minted MBA.

I can remember being wracked by conflicting feelings - the excitement of all the new knowledge I was acquiring at the same time hearing at lunch about layoffs in other divisions of my company.

During this period, I often thought to myself: "Is my career with this company over before it starts?"

Well, fortunately, I made it through the year of 1974 and by 1976 business was humming and I had been promoted twice.

Do you know how I calmed myself down during the bloodletting of 1974?

By harking back to my previous entrepreneurial experience, both as a kid and in college.

I simply remembered that I had taken a needed service (lawn mowing at age 10 and sandwiches for sale in college), put out some flyers and the business came.

So, during 1974 I launched a couple of evening and weekend entrepreneurial ventures - one working for a friend who owned a mortgage company and paid me for each application I went through and scored and one arranging a Spring trip to Jamaica for a group of college friends.

Now, let me assure you that I am not a "dyedd in the wool" entrepreneur - I just always like to have a little extra pocket money and my childhood allowance, college jobs and even my corporate job didnt always provide it.

I encourage you to take a deep breath as we enter the blessed holiday season and clamly reflect on how entrepreneurial who have probably already been in your life but dont give yourself credit for.

For example, were you one of the parents who helped spearhead the sale of chocolate bars to raise money for your son or daughter's high school band? If so, you've shown entrepreneurial licks!

Just take a look around for services that people cant seem to do without - is there something missing in the offerings of current providers?

Is there a product you or your spouse cant find, but you just know that a lot of other folks like you are looking for it also?

With the ability to work from home and the ever shrinking costs of running your business, even a part-time business can provide you with a couple thousand dollars a month...or even more.

No matter how drastic your current personal financial situation, dont ever forget you are your best source of help!

October 27, 2008

You may be surprised to hear a quotation from Tim Kane, an economist at the Kaufmann Foundation, a leading think tank for entrepreneurism: "People in the older age brackets are much more likely to successfully start companies than young people".

Take that Gen X!

Our age may sometimes get in the way of keeping a corporate job, but our unique blend of hard-won experience, mature discipline and access to start-up capital gives us an edge when it comes to starting our own businesses.

In our currently very turbulent economic situation, many Americans are searching for a guiding light to what lays ahead. it is interesting that a September 2008 survey by the Kaufmann Foundation revealed that 70% of respondents agreed that success and health of our economey depends upon the success of entrepreneurs.

And, since those of us in the 55-62 age range have been the fastest growing group of new entrepreneurs in the U.S. for the past four years, this increasingly means that BOOMER ENTREPRENEURS in particular will help lead our economy to better days.

So, I hope that a smile crosses your face when you reflect upon the fact that the big guys may not want to hire us after age 50, but boy they sure love to buy from our businesses!

October 15, 2008

Corporate C-level executives rarely face extreme personal financial challenges because they enjoy very lucrative employment contracts which include "golden parachute" clauses that pay them sometimes obscene amounts of money if they are fired.

Although many of the C-level executives are over age 50, the vast majority of 50+ corporate managers aren't C-Level and so do not enjoy such attractive employment benefits.

The hard, but true fact is that you have very little flexibility in increasing your income in any given year when you work in the corporate world. And often you receive relatively little in the way of "exit money" should you be downsized.

If you suddenly need $20,000 more income, good luck. The typical corporate salary is only going up about 3% per year.

So, how do you bring more financial flex to your life?

I strongly urge all individuals over age 40 to create what I call the "silver parachute" to protect their personal financial security should they face any of the elements we are seeing in the current "perfect storm" of personal finance - skyrocketing adjustable mortgage payments; job loss with little severance pay; or a significant decline in their 401 k balance.

How do you create your personal "silver parachute"?

You need to carefully examine all of your work and life experience and your well-honed talents to see what you can sell to boost your income.

For example, can you sell your corporate management skill as an independent contractor, (perhaps even to your existing firm should they downsize you)?

Can you sell what you do as a hobby to other individuals with a similar interest?

Do you have volunteer experience that can be buffed up as a service to sell?

Are you experienced enough selling household items on eBay that you can crank up an eBay store and start to make some real money?

Can you provide training, coaching or consulting as a subcontractor to a larger company?

Thanks to technology and a greater willingess to buy from them, most new businesses can start in a home office today. This is great news, because many home-based businesses can be run with monthly overhead expenses well below $500, thus allowing you as the business owner to access a large part of every dollar of sales as personal income.

For example, if you can charge $75 per hour for your consulting knowledge and you can land just 10 hours per week of consulting work, you will gross $750 per week, $3000 per month, most of which will be available to pay your family bills. This is a nice financial return for part-time work!

So, lay out your experience and skills and get ready to pack your "silver parachute".

June 19, 2008

As I do from time to time, I spoke yesterday at a local job club about my "10 Keys To Starting a Great Business After 50".

I didn't ask (it would be impolite) but i'm guessing that all of the 25+ attendees were at least 45-years old.

And for some this may be the first time in 15 years or longer that they have had to sweat through writing a new resume and hit the street looking for job interviews.

I started off by emphasizing one of my most strongly held beliefs - that any time you find yourself out of the corporate world after age 40 and after age 50 even if you still hold down a corporate position, you owe it to having your best possible future life to seriously examine the entrepreneurial life.

The typical corporate employer has a whole section of their HR department devoted to one task - prepare to lay off people the next time the company has even a slight financial downturn.

They have a plan to get rid of 40+ managers - what plan do you have if they do it to you?

For many years, a sufficient "plan" was to brush off your resume every few years, ready to start calling everyone you know in your industry if they handed you the pink slip (today it's more likely to be e-mailed to you!).

But today you have whole industries imploding - by the end of 2008 more than 30,000 white collar managers will no longer work for Ford, GM, and Chrysler and (this is the key point) THEY WILL NEVER WORK IN THE AUTOMOBILE MANUFACTURING INDUSTRY AGAIN!

No matter how talented they are at their jobs. No matter how many "superior performance ratings they received over the years - these people need to find a completely new line of work.

Your corporate employer plans ahead to get rid of you, why don't you take some time to plan an alternative work path for yourself.

If you do, you will quickly realize that despite some level of financial risk, you will almost never enjoy as much flexbiility in your schedule, freedom to pursue new ideas and unfettered growth in your income in any corporate job as you will being your own boss.

So, you owe it to your preferred future of work to seriously take a look at what kind of entrepreneurial venture can provide the satisfaction and reward you seek from your work.

June 13, 2008

A couple of nights ago I attended an organizational meeting for raising funds for a non-profit group operating in my town that provides housing and training for economically-challenged families with children.

As I listened to each member of the group introduce themselves, it dawned on me that the majority of them are self-employed business owners, just like me.

Among the volunteers are a local independent insurance agent, the owner of the local UPS store, a marketing consultant and several other small business owners.

Why am I discussing this topic in today's blog?

Because I bet that the make-up of my volunteer charity group is fairly common across the U.S.

Small business entrepreneurs not only provide virtually all job growth today in the U.S., but they also are much more active in charity and volunteer work than their corporate brethren.

I remember that as a corporate manager I was working 60+ hours per week, including my 2-hour roundtrip commute each workday. I rarely made it home before 7 pm and then if I wanted to attend a charity or volunteer group meeting, I had to rush to change my clothes, eat and make the meeting.

So, naturally over time I withdrew from most of my charity work and I like to think that my community was the worse for not having my involvement in such activities.

One of the wonderful opportunities you will enjoy as a 50+ Boomer entrepreneur is that you too will now have the flexibility of schedule to support whatever charity and/or volunteer work you choose.

Not only will your small business management experience be very valuable to your charity group, but your availability during the daytime and evening hours will set you apart from most of your friends who continue to slave away in the corporate world.

June 06, 2008

When I first talk with a prospective 50+ business owner, one of the most common comments I hear is that even though they are often burned out emotionally from the demands of being a corporate manager for thirty years or more, they just don't have full confidence yet that they can find the level of work satisfaction and reward they are looking for at this point in their lives in running their own business.

In answer to their concerns, I bring up a life experience that is very common to many of us who are 50 and over - we were teenage entrepreneurs (although we didn't have the slightest idea what that word meant). I don't how it worked in your household, but throughout my whole childhood into my teenage years my weekly allowance was just $1 and that amount was granted only after I completed a list of weekly chores (plus the ones of my older brother he bribed me to do).

I usually received a birthday check for $10 from my grandma and as I got older my out-of-town relatives would send me a Christmas check.

But, by and large if I wanted to make a purchase that exceeded my accumulated allowance, I had to work to produce the money.

I was a bit of a shy kid, so it wasn't all that easy to solicit jobs from my neighbors but my burning desire to have the latest toy or a new pair of baseball shoes highly motivated me.

During the summer when I turned 10 (my birthday is in the middle of July - I'll be 60 this July), what had been a few lawns I mowed on my street exploded into a full-blown lawn service company, when as the result of my grandma's promotion among her bridge club ladies, I suddenly had 40 lawns to cut each week!

To this day, I remember the sense of pride I took doing the work just right and how I ended up with more than $2,000 in my bank account by summers end!

In fact, thoughout my 18 year corporate career whenever the going got rough (more often than I would have liked), my thoughts would return to my experience as a 10-year "entrepreneur".

When I finally stepped out of the corporate world at age 40 to start my first company, I was powered by the confidence that comes from having done the entrepreneurial thing before.

I bet that if you think about it, you'll realize also that by becoming a Boomer entrepreneur, you are "closing the circle of your life" as far as being entrepreneurial.

June 04, 2008

It is estimated that more than 35 million Americans work full-time or part-time from a home office.

A good proportion of these people, maybe as high as 40%, are self-employed running their own businesses.

Why is the thought of establishing your business in a home office so attractive?

Let’s take a look at five significant advantages to locating your business at home.

1. You can save thousands of dollars in expenses paid for an outside space.

In many metropolitan areas, rents for decent office space run $12 per square foot and up. Rent for a retail store in a typical strip mall often starts at $18 per square foot ($1500 per month), and this figure doesn’t include common annual increases for the strip malls maintenance and property taxes.

When you rent outside space, you are also usually required to set up your own account with the gas and electric companies, and you may have to pay several hundred dollars to hook up a couple of phone lines.

2. You can coordinate your work and personal schedules more effectively.

When your office is only feet away from your living room or basement, you may find it much easier to accomodate the scheduling needs of your family with a flexible work schedule.

Many homebased businesses are started with the expressed intention of being able to earn money while the business owner spends more time with her children.

Even though new business owners typically work long hours each week growing their businesses, working from home can offer you a much more flexible work schedule.

3. You can enjoy "creature comforts".

A typical business office includes just a door, a set of walls and maybe a private bathroom. You can add such comfort items as a sofa, a mini-fridge and a television, but it is often not the same level of comfort you are used to from your recliner chair or spa bathtub.

You must be careful not to allow too many distractions when you work at home, but it certainly is nice to be able to take a relaxing break by sitting on your patio watching the birds and squirrels in your yard. Or by taking a brisk half-hour walk around your neighborhood (one of my favorite pastimes).

4. You have access to storage and assembly space.

A good number of homebased businesses either inventory and sell a line of products (such as Shaklee) or assemble components into a finished product (such as gift baskets), which they then sell.

For these types of businesses it is important to their productivity that they have enough open space to properly organize their inventory and/or raw materials. A large table may be necessary for assembling a craft product and it is often helpful to have a long table to pack products you are preparing to ship via UPS or the U.S. Postal Service.

It can often be quite a challenge for find an assembly-type space outside of your house that is both large enough and affordable.

5. You have a short "commute to work".

I can remember many cold winter days when I had to stand out on the commuter train platform in freezing weather waiting for an already overfilled train to pull up.

When you locate your office at home you save many hours of commuting time, which you can then invest in more productive activities, such as calling sales prospects or preparing a proposal to be sent out.

And working at home permits you greater flexibility about when you work. Some business owners with small children take a break from work from 4 pm until the kids go to bid and then they work until midnight on their companies.

And many homebased entrepreneurs fit needed business projects into unexpected chunks of time that unexpectedly appear, such as when a planned family event is cancelled.

Even with the most disciplined cost control and effective collection of money your business can run short of cash.&nbsp; As a matter of fact, this is a fairly constant situation when you are growing your business.

To provide the capital to launch and grow three businesses over the past twenty years, two of them after I turned 50, I’ve used every one of the financing technqiues described in this blog. You benefit from my personal experience.

Finding Cash To Launch Your Business

This period includes the time from the day you crystallize your business concept through the first six-twelve months after you officially open for business.&nbsp; You can look at your business during this phase as a "money sponge"–everything you do seems to require cash.

You can feel very conflicted during this period regarding your money.&nbsp; You have read or been told that you need to conserve your cash in the early days of your business, and yet there seems to be so many expenditures you must make.&nbsp; The key question to answer is: Can you successfully pursue your marketing strategy while keeping tight control on your available cash?&nbsp; If not, you will find yourself visiting the bank for a cash advance more often than you may wish.

Sources of Start-Up Capital

Savings

The is probably the most commonly used source of start-up capital, as it should be.&nbsp; Be realistic.

– why should anyone else take a financial risk on you until you have proved that you can make a profit with your own money?

The ideal scenario would be for the new business owner to have planned ahead enough that she accumulates all of the seed money she needs before she quits her job and opens for business.&nbsp; The reality is that the personality type that will undertake a new business launch is also characterized by impatience.&nbsp; This often leads to fudging on the amount of money you start with.

Your family’s active help can make the money go further by pitching in on necessary tasks, such as typing billing, stuffing envelopes, answering the phone, doing the bookkeeping, passing out flyers, etc.

Credit Cards

If you enjoy good personal credit, you will receive at least several offers of "cut rate" credit cards.&nbsp; A common technique is to offer you a "special introductory interest rate" of between 6.5% and 8.0%. If you read the financial pages in the newspaper, you know that this rate is below the current prime rate.

So what is the catch?&nbsp; The rate is usually only good for six months, at which time it typically rises to 6.5% over prime (around 15%).&nbsp; Obviously if you plan to carry a significant balance more than six months, you may want to re-examine the use of these supposed special deals.

It is, however, very convenient to be able to walk into a bank and walk out with $5,000 in cash, without having to deal with a bank officer.&nbsp; We recommend that you apply for at least one of these reduced-rate cards and put it away safely until you find your business in a first-year emergency or until a very certain selling opportunity comes along.

Family Loans

This source of capital is probably the second or third most-widely used source of seed money.

If you have thought out your business idea even a little you can usually approach at least one family member for a $1000-$3000 loan.&nbsp; We call this "love money" because they lend it based more on their love for you than from a thorough review of your business plan. Dollar amounts above this level are more difficult to obtain without some more formal commitment, such as a promissory note. If you fall behind in paying, don’t be surprised if at Thanksgiving dinner you are approached by the lender for a "heart to heart" talk.

One key guideline to follow: Don’t borrow from a family member who can’t afford to lose the money.

Home Equity Loans

During the 1990’s, borrowing money on the equity in your house was a popular way to finance a business launch. The most important fact to remember with this type of loan is: If you default, you don’t just walk away and chalk it up to experience. The bank will be on your trail fast! They usually don’t really want to have to sell your house, so they will press you to agree to a repayment schedule, which will often require that you find a JOB very quickly.

Be aware: Apply for a home equity before you quit or lose your job, unless your spouse brings in a substantial income.

Insurance Loans

Although it is less frequent today than it was in the ’70’s and ’80’s, many people today own a type of insurance known as whole life.&nbsp; This policy is a combination of life insurance and savings, as part of your premium goes into a pool which is invested by the insurance company.&nbsp; After the first 3-4 years, the dollar value of the savings portion, known in insurance parlance as "cash value" starts to increase fairly dramatically.&nbsp; For example, on a seven-year old $100,000 face value whole life policy, the cash value is $8,000 or more.&nbsp; You have the right to borrow all of the available cash value (total value less any previous loans) at very attractive interest rates–averaging 8%. You are charged interest only, once per year. If you die before repaying, the loan amount is deducted from the death proceeds.

Barter Exchange

Barter is defined as "to trade without the exchange of money." The key to the exchange is a method for acceptably valuing each parties offer.&nbsp; This is where barter exchanges come in.&nbsp; These are businesses whose&nbsp; business is to introduce traders to each other, establish fair dollar values and record the transaction for the IRS.

Active traders use the barter exchange’s computer to keep track of how many barter "points" they have accumulated and how many points it takes to buy certain products and services. A typical barter exchange might start with a carpet installer offering $1,000 of installed carpet in return for $1,000 in oil changes which are traded to a trucking company, for $1,000 in trucking which is then traded by the carpet installer to a printer who offers $1,000 in printing.

As a new business owner, you can create your own barter exchanges simply by approaching suppliers of goods and services you need and don’t want to pay cash for.

Informal Investment Groups

Some very successful business concepts derived their initial funding by putting together a group of private investors among the founder’s friends and acquaintances, We are personally familiar with a start-up that was funded by obtaining a $1,000 investment from each of 25 investors, all members of the same softball league, who bought shares of stock in the new corporation with the clear understanding that they could lose all of the money, but that they would enjoy some very fun stockholder meetings.

If you desire to explore this option, we suggest that you consult first with a small business attorney experienced in equity investments for new corporations.